In every market touched by the Internet, traditional business models have had to adapt or die.  Especially where sellers had been able to make big markups based on information asymmetry and control of local distribution.  They were astounded when Internet-savvy consumers came in with their own data on quality, costs and prices.  And they agonized when new online competitors from faraway places emerged to challenge their local market dominance.

Market middlemen who cling to old ways are headed for the dustbin of business history.  Just consider a few examples:

• Online travel sites lifted the curtain on the mysterious world of booking airline seats and hotel rooms.  Travel agents who add real value for customers are soaring, but those who just book flights have crashed and burned.

• Optometrists used to make big bucks marking-up contact lenses to their patients.  But those markups disappeared in the blink of an eye once consumers could buy their lenses online. Optometrists who saw this coming focused on their services and helped patients find the best deals on lenses.

• Ticket brokers who believe they alone should control secondary markets for sports and concert seats are finding themselves on sidelines as ticket holders turn to the Internet to sell seats they can’t use.

• Real estate agents are finding fewer homeowners are still willing to pay a $30,000 commission to sell a $500,000 home, especially when Internet-savvy buyers do most of their own legwork using online real estate sites.

Now, the Internet is happening to auto dealers too.

Recently I finished reading the Harry Potter series of books and decided to sell them.  And a couple of months ago I was moving and sold my Star Wars DVDs.

In neither of these sales did I need the permission of J.K. Rowling or George Lucas.  They were my books and my DVDs to resell and not subject to the approval of the author.

The reason I did not need to get the author’s permission is because of the “first-sale doctrine” of the Copyright Act.

The first-sale doctrine basically allows you to resell something you bought without getting the author’s permission and without violating copyright law.

Today’s Wall Street Journal features a full-page debate (p.B5) on whether retailers should be forced to collect sales tax for all states — even where the business has no physical presence.

The article includes a debate between Michael Mazerov, who wants force all online sellers to collect taxes for all states, versus my argument in favor of the present national standard established by the Constitution and Supreme Court rulings.

Take a few minutes to compare the arguments.  And if you agree that the physical presence rule is the best way to preserve e-commerce as an opportunity for small businesses, please vote in the WSJ online poll.  (this morning’s printed poll results came over the last several weeks — before this debate was published ).

It’s a common refrain that those who protest too much might have much to hide.  Wednesday’s introduction of the “Marketplace Equity Act” (MEA) is a prime example of this behavior.  Just like the  Mainstreet Fairness Act before it, the MEA’s name has little to do with its true implications.

At a breathless Capitol Hill press conference, advocates for a new Internet sales tax regime exclaimed the benefits that an ill-defined, expansive and costly regulatory system would have for small businesses.

Not surprisingly, Walmart – a key advocate for online sales taxes and a significant constituent for bill sponsor Rep. Steve Womack (R – Ark.) – ceded the stage to a handful of small business owners who spoke admirably about the creation of a pseudo IRS.